Key Game Changers for the Auto Industry

Take a look at some of the key game changers the auto industry is facing in the not-so-distant future.

Published: 6/10/2014Author:WWL Market Intelligence

Intensive research is being put into development of the self-driving car.

The auto industry has already changed the way we live several times over, still the industry is constantly changing and developing.

Fuel efficiency – What will be the next powertrain?The world’s car park is going to grow significantly over the next decade. Already the auto industry is facing a raft of challenges, from increasing congestion and the price of fuel to pollution and global warming-inducing emissions. The pressure from governments on automakers to be cleaner is constant, and the car industry is working hard to meet harsher governmental fuel efficiency and emission goals. In reply to the increased demands placed on them, automakers have never produced more hybrids, EVs and cars with alternative drive trains than today. In the future analysts expect more than 80 per cent of the vehicles sold globally to be a kind of hybrid, completely changing the makeup of the global car park in the process.

Growth in emerging marketsSales in South America are expected to grow to 8.2 million units by 2020, according to IHS Automotive. This is equal to a CAGR (compound annual growth rate) of 4.4 per cent which is well above the forecasted global growth rate of 3.7 per cent. The drivers for increased car ownership in South America are growing consumer wealth following the transformation of national economies, building on exports of natural resources and, increasingly, export oriented manufacturing. In India, rising income and low vehicle density contribute to a healthy auto sales outlook. In addition there are several factors that support strong sales growth, such as the expansion in main roads in recent years with major infrastructural improvements still to come. The affordability of new vehicles is increasing due to more competition among automakers, technological developments and higher disposable income.

Autonomous driving – look, no hands!Driving has always been connected with risk. Every year 1.2 million people are killed in road accidents and many more are injured. Intensive research is being put into development of the self-driving car. A driverless car has sensors, cameras and GPS for monitoring other traffic and the road. The car then calculates where and how to drive. The co- founder of Google, Sergey Brin, predicts that driverless cars will be on the market in five years. This might be optimistic, but the prototypes that Google already uses to ferry its staff around the Google campus are striking. The potential for comfortable and safe driving is huge.

New car “consumption” patterns; Carsharing – use the car you needTraditionally, the car ownership model was purchasing or leasing. As car ownership is less closely associated with status and prestige in today’s society, carsharing has become increasingly popular in urban areas. With cars readily available in towns and cities, people can simply pick up a car when they need it. There is usually a fixed monthly fee and cost for mileage. The rental company takes care of service and maintenance. The means more flexibility for customers and no service and parking fees. The “car by the hour” model fundamentally changes the way we consume cars and is set to gain in popularity, particularly in densely populated urban areas.

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